QQQM vs XLY: Correlation & Overlap
Invesco Nasdaq 100 ETF (QQQM) and Consumer Discretionary Select Sector SPDR Fund (XLY) show a very strong relationship: their 3-year correlation of weekly returns is 0.82. The two funds also share 10.4% of their portfolios by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are QQQM and XLY?
Over the past 3 years, QQQM and XLY moved with a correlation of 0.82, which is very strong, meaning they move nearly in lockstep. Little has changed lately, as the 1-year reading of 0.75 lands near the 3-year figure. Over 5 years the correlation is 0.87, and the annualized covariance of weekly returns is 313.2 %².
By 3-year correlation, XLY places #21 of the 103 assets tracked against QQQM. Correlation aside, the last 12 months split them widely, with QQQM ahead by 26.5 points (+26.4% versus -0.1%). Stability stands out here, with the rolling one-year correlation confined to 0.75 through 0.90.
How is this computed?
Pearson correlation on weekly returns: ρ(A,B) = cov(rA, rB) / (σA · σB), over windows of 52, 156 and 260 weeks. Covariance is annualized (×52) and expressed in %². Full definitions on the methodology page.
QQQM vs XLY: side by side
| QQQM (Invesco Nasdaq 100 ETF) | XLY (Consumer Discretionary Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +26.4% | -0.1% |
| 5-year return | +96.1% | +31.8% |
| Volatility (ann.) | 19.5% | 19.7% |
| Beta vs S&P 500 | 1.28 | 1.15 |
| Max drawdown (3Y) | -22.7% | -26.0% |
| Dividend yield | 0.46% | 0.78% |
| Expense ratio | 0.15% | 0.08% |
| Assets under management | $97.1B | $22.5B |
| Sector / category | ETF · US Growth & Tech | Sector ETF |
QQQM is a Large Growth fund from Invesco: $97.1B under management, 105 holdings, a 0.15% expense ratio, a 0.46% trailing dividend yield. XLY is a Consumer Cyclical fund from State Street Investment Management: $22.5B under management, 47 holdings, a 0.08% expense ratio, a 0.78% trailing dividend yield.
Portfolio overlap between QQQM and XLY
The two portfolios are largely distinct: 10.4% of the funds' weight sits in the same underlying holdings (9 common positions). Correlation tells you they move together; overlap tells you why.
| Common holding | Weight in QQQM | Weight in XLY |
|---|---|---|
| AMZN | 4.50% | 24.32% |
| TSLA | 2.77% | 16.18% |
| BKNG | 0.72% | 4.04% |
| SBUX | 0.55% | 3.08% |
| DASH | 0.43% | 2.24% |
| MAR | 0.42% | 1.96% |
| ABNB | 0.35% | 1.96% |
| ROST | 0.34% | 1.90% |
| ORLY | 0.33% | 1.85% |
Largest positions held only by QQQM: NVDA (8.15%), AAPL (7.39%), MSFT (5.93%), MU (4.69%), AMD (3.48%). Only by XLY: HD (5.54%), MCD (4.11%), TJX (3.55%), LOW (2.94%), GM (1.94%).
Overlap = sum of the smaller of the two weights across common holdings, from issuer disclosures as of 2026-08-26. Top 9 common positions shown.
Year-by-year returns
| Year | QQQM | XLY |
|---|---|---|
| 2022 | -32.5% | -36.3% |
| 2023 | +55.0% | +39.6% |
| 2024 | +25.7% | +26.5% |
| 2025 | +20.9% | +7.4% |
| 2026 | +17.7% | -2.6% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are QQQM and XLY good diversifiers for each other?
No: a correlation of 0.82 means QQQM and XLY tend to fall together, which is precisely when diversification is supposed to help.
FAQ
What is the correlation between QQQM and XLY?
As of 2026-08-27, the correlation of weekly returns between QQQM and XLY is 0.82 over 3 years, 0.75 over 1 year and 0.87 over 5 years.
Is XLY a good diversifier for QQQM?
No: a correlation of 0.82 means QQQM and XLY tend to fall together, which is precisely when diversification is supposed to help.
How much do QQQM and XLY overlap?
The two funds share 9 holdings amounting to 10.4% of weight, per issuer portfolio files dated 2026-08-26.
Use this data
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Hubs: QQQM correlations · XLY correlations
